FAKHRUDDIN T MALIK,MUMBAI vs. ITO WD 21(1)(5), MUMBAI

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ITA 2642/MUM/2023Status: DisposedITAT Mumbai20 November 2023AY 2014-20154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s ex-parte order due to lack of opportunity and the assessee's age and technical limitations. The matter was remanded to the CIT(A) for fresh consideration.

What were the facts?

The assessee purchased two flats, and the stamp duty value exceeded the agreement value by Rs. 14,34,500. The Assessing Officer treated this difference as income under Section 56(2)(vii), which the CIT(A) upheld ex-parte. The assessee, an 82-year-old, claimed notices were served during COVID and he lacked computer access.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without providing a reasonable opportunity to an elderly assessee, and whether the addition under Section 56(2)(vii) was justified without referring the matter to the DVO.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI PAVAN KUMAR GADALE, JM &

For Appellant: Shri Joginder Singh, Sr. DR
For Respondent: Shri Joginder Singh, Sr. DR
Hearing: 20.11.2023

Appellant) : Respondent) Appellant/Assessee by : None Revenue/Respondent by : Shri Joginder Singh, Sr. DR : 16.11.2023 Date of Hearing : 20.11.2023 Date of Pronouncement O R D E R Per Padmavathy S, AM:

This appeal is against the order of the Commissioner of Income Tax (Appeal)-33, Mumbai / National Faceless Appeal Centre (NFAC), Delhi dated 06.06.20123 for Assessment Year (AY) 2014-15. The assessee has raised the following grounds of appeal:

1) The Learned CIT(A) has erred in passing an ex-parte order without giving reasonable opportunity to the appellant.

2) The Learned CIT (A) has failed to appreciate that the notice of hearing were issued during covid period and thereafter through Income Tax Portal however the appellant is aged person of 82years and has no access or knowledge of computer. There for the appellant urges that the order passed by the CIT (A) may be set aside.

3) The Learned CIT (A) has failed to appreciate that the addition of Rs. 14, 34,500 u/s 56(2)(vii) of the Act was without considering the fact and without referring the matter to the DVO at request of the appellant during assessment proceedings.

4) Your Appellant prays that the addition of Rs. 14,34,500/= U/s 56(2)(vii) may be deleted and/or the matter may be referred to DVO of Income Tax.

5) Your appellant craves permission to amend, delete and alter any or all the grounds at the time of hearing

2.

The assessee filed a return of income for AY 2014-15 on 27.02.2015 declaring total income of Rs.2,43,819/-. The case was selected for scrutiny under CASS. During the course of assessment, the Assessing Officer (AO) noticed that the assessee has purchased two flats (flat No. 701 & 702) at Olive Apartment, Santacruz, Mumbai and that the stamp duly value as on the date of agreement is higher than the agreement value to the extent of Rs. 14,34,500/-. The AO in this regard issued a show-cause notice to the assessee as to why the said difference cannot be treated as income from other sources under section 56 of the Income Tax Act, 1961 (for short 'the Act'). The assessee submitted before the AO that the advance towards purchase of the flat was made in cash and the booking/allotment was done in FY 2012. Therefore the assessee submitted that the market value for the year 2012 should be considered according to which the registration value is higher than the market value and no addition under section 56 is warranted. The AO did not accept the submissions of the assessee and held that the allotment

3 Fakhruddin Taherali Malik letter produced by the assessee are not genuine. Accordingly, the AO proceeded to treat the differential amount between the stamp duty value and the value as per agreement as income from other sources. Aggrieved the assessee preferred an appeal before the CIT(A).

3.

Before the CIT(A) the assessee raised grounds stating that the addition under section 56(2)(vii) could have been made without referring the matter to the DVO at the request of the assessee. However the assessee neither appeared in person nor made any written submissions before the CIT(A). Therefore, the CIT(A) proceeded to decide the case ex-parte and based on the details available on record. The CIT(A) the that the assessee has not submitted any documentary evidence in order to prove that the advance for booking the flat was given in the FY 2012 and that the assessee made a request before the AO to refer the matter to DVO. Accordingly the CIT(A) upheld the addition made.

4.

Aggrieved the assessee is in appeal before the Tribunal. Before us none appeared for the assessee and we heard the DR who supported the orders of the lower authorities. From the perusal of the grounds of appeal and other available records we notice that the assessee is a senior citizen aged 82 years and does not access or has knowledge of computer. It is also noticed that that the most of the notices of hearing before the CIT(A) was served during the peak of the covid period. Therefore in the interest of natural justice and fair play in our considered view, the assessee should be given one more opportunity to represent the case before the CIT(A). Accordingly we remit the issue back to CIT(A) with a direction to consider the issue afresh by calling for details as may deem necessary and decide in accordance with law. The assessee is directed submit the relevant

5.

In the result, the appeal of assessee is allowed for statistical purposes.

Order pronounced in the open court on 20-11-2023.

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